The objective of this project is to define the role of extracellular matrix in conjunction with soluble inductive molecules in cartilage and bone formation, both in embryogenesis and in postnatal life. The understanding of this functional entity is a key step towards biologically controlled regeneration of skeletal tissues, and could have an important impact on the therapeutic approaches in skeletal diseases. Our discovery of the role of basement membrane components in bone differentiation, indicates the importance of extracellular matrix in bone formation. We have also identified various active growth and differentiation factors bound to basement membrane. Some of them, like bone morphogenetic protein-3 and transforming growth factor-beta bound to type IV collagen of the basement membrane and influenced the chondrogenic and osteoblastic phenotype in vitro. We showed that TGF- beta remained bound to purified collagen type IV, suggesting caution in the interpretation of cellular activity related to extracellular matrix components. The colocalization of type IV collagen, laminin and bone differentiation factors in development and disease, supports the concept of a biologically active extracellular matrix-growth factor functional complex (EMGFC). Therefore, apart from expanding the basic scientific insight of the biological activity and importance of EMGFC, additional experiments in vivo will define the best carrier and conditions for the application of cartilage and bone inducing factors in skeletal diseases such as Paget's disease, periodontitis, osteoporosis and osteoarthritis.